Assume that basic profit for 2022 was calculated from the following way: Numerator = $200,000 - $40,000 = $160,000 Denominator = 80,000 common shares outstanding Basic EPS = $2.00

Assume that the bonds in the previous part are NOT convertible, but come accompanied by capital certificates (stock warrants). There are enough warrants to buy 24,000 shares at $35 per share. The median market price for 2022 was $40. Tax rate of the company was 25%.

Calculate the diluted profit for 2022 and indicate whether or not it is presented together with the basic gain.

Suppose the average market price for 2022 was $30. Explain how this information would affect diluted earnings for 2022.